5 Things to Know About Mid-nuptial Agreements

5 Things to Know About Mid-nuptial Agreements

Most
people understand prenuptial agreements—the agreement that is
signed before people
get married. Many do not know that after marriage, it is not too late
to establish how finances would be handled if the married couple is
faced with separation or divorce.

An
agreement prepared after marriage, and not part of divorce
proceedings, is often called a Mid-nuptial Agreement.

Mid-nuptial
agreements may be prepared and signed at any time after marriage. A
Mid-nuptial Agreement may also be used to revise or revoke a
prenuptial agreement that was prepared at a different time in the
married couple’s lives.

1. Not just for millionaires

A
Mid-nuptial Agreement is not just for millionaires. A Mid-nuptial
Agreement can be a helpful document prepared as part of a new
business transaction or investment, estate planning, family business
succession planning, or other changes in life during the marriage.

2. There is more than one type of Mid-nuptial Agreement

Spouses
often believe that Mid-nuptial Agreements (and Prenuptial Agreements)
are used to exclude a spouse from a business and the value of the
business in a divorce. While those types of agreements do exist,
there are other alternatives.

For
example, if one spouse desires to exclude the other spouse from a
business if the parties divorce, possibly there is real estate,
retirement, or other assets the non-business owner spouse would
receive if divorce would occur.

Also,
the parties may use the Mid-nuptial Agreement as a tool to make the
risk of a divorce less expensive and less time consuming if a divorce
would occur. A significant expense in divorce is arguing about how to
value each asset. A Mid-nuptial Agreement may identify a roadmap for
how assets are valued, distributed, and the possible structure of a
buyout if the valuations require additional consideration.

3. May be used to protect the non-business owner spouse

A
Mid-nuptial Agreement may also be used to protect the non-business
owner or investor spouse. If a business or investment is highly
leveraged or risky, the non-business owner spouse may use a
Mid-nuptial Agreement as protection if a divorce would occur.

4. Cannot force a spouse to sign a mid-nuptial agreement

Both
parties must agree to the Mid-nuptial Agreement. One party cannot
force the other to sign.

5. Child Support and Child Custody Are Subject to Change

A
party should be careful about including a term regarding child
support and child custody in a Mid-nuptial Agreement. Even if the
parties agree to include a term about child support or child custody
in a Mid-nuptial Agreement, pursuant to 23 Pa.C.S. 3105, a term
regarding child support, visitation or custody shall be subject to
modification upon a showing of changed circumstances.

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About us

Levin Hoover Family Law Firm focuses exclusively on family law, including areas such as divorce, child custody, alimony, business valuations, spousal and child support, grandparent custody, prenuptial agreements, mid-nuptial and post-nuptial agreements, asset and debt distribution and more.